JIOBLACKROCK: WHAT CAN MF INVESTORS EXPECT?

Parentage alone may not be enough for the joint venture to conquer the Indian mutual fund industry

- Abhishek Mukherjee

This is BlackRock's second innings in the Indian mutual fund arena after its 10-year JV with DSP ended abruptly in 2018.

(BLOOMBERG)

When India's largest company announced a big-bang joint venture (JV) with the world's biggest asset manager to enter the country's fast-growing mutual fund industry, it marked the coming together of two titans, and ratcheted up speculation to fever pitch. After all, this was in a sense the corporate equivalent of Sachin Tendulkar teaming up with Lionel Messi.

The Mukesh Ambani-led Reliance Industries Ltd (RIL) is not known to play second fiddle in any industry it sets its sights on. And BlackRock, with assets under management of a staggering $11 trillion, is referred to as the third most important economic entity on the planet, behind only the US and China.

This is BlackRock's second innings in the Indian mutual fund arena, after its 10-year JV with DSP ended abruptly in 2018, reportedly after both partners sought full ownership of the business.

After receiving all the requisite regulatory approvals by June, JioBlackRock Asset Management Company (AMC), the 50:50 JV between RIL subsidiary Jio Financial Services and BlackRock, commenced operations by launching three cash funds, followed by five index funds in August. The new fund offer (NFO) for its maiden actively managed equity product, a flexicap fund, closed earlier this month.

Many industry watchers saw this as an uncharacteristically subdued start for a company with this pedigree. Initial impressions, however, have a tendency to be deceptive.

In an interview with Mint, Sid Swaminathan, JioBlackRock AMC's managing director and chief executive officer (CEO), was unambiguous about the company's goals: "We want to be among the top five players in the industry over the next five years or so."